Is there a smoking gun in the banking industry in Australia?
"That's the central question being asked anew every day around the sector," Banking Day observed in a May commentary on the deep stresses in the industry, wrapped into an article headlined
Commonwealth and ANZ queue CEO switch.
A recap on further themes from that
analysis may help update thinking on the promise, or disappointments, soon to unfold before a panel of six Coalition MPs, abetted by three Labor members and the sole Green MP, that make up the House of Representatives' Standing Committee on Economics.
The examination by these ten on Tuesday, Wednesday and Thursday allows three hours to question each CEO.
The process will be led by the committee chair, second term MP David Coleman. He is a former director of Yellow Brick Road with a CV that features Nine Entertainment Co, PBL Media and LookSmart.
Of the Labor members of the committee two are junior frontbenchers; Matt Thistlethwaite, the opposition's shadow assistant minister for Treasury, and Pat Conroy, who serves both as shadow assistant minister for climate change and shadow assistant minister for infrastructure.
It's the Green MP, Adam Bandt, who will have a smite more experience in dealing with bank brass than others on the panel, given his service in past parliaments as the Greens spokesperson on treasury and specifically banking.
The House of Representatives' economics committee may surprise this week by delving into topics not well aired before. But let's face it, expectations must be low on the politicians' side.
Stakeholders may not be so forgiving for the CEOs in the committee's hot seat, should any be cornered on sensitive or unexpected topics. One report in the
Financial Review over the weekend touched on the preparations occupying the CEOs and their helpers, likened to the dramas of getting set for a presidential debate in the US.
Three hours before a parliamentary panel may trip one CEO but there's little in the political backgrounding reported (in the
AFR once more, and also in The Australian,
here and
here) that may be unsettling.
The compromising aspect of this week's hearing is the design of the process itself.
Earlier in the year the
editors at this newsletter were cynical over the case for an all encompassing and intrusive study of the industry.
But as the mostly Labor driven caravan promoting a royal commission gathered momentum, Banking Day
modified its position in line with the leanings of our more independently minded and valued contacts.
The murmurings of bank directors in our orbit, in particular, changed our mind, the view mostly along the lines of 'nothing to see here'. These contacts insider views intrigued us, these directors owning up to their concern at the murky treasures awaiting a determined investigator probing other banks (but not their own).
Our new sentiment inspired a non-partisan take on Labor's policy.
"Putting hands and fingers on the most sensitive points of the banking body is the forthcoming object of the banking and finance royal commission," was
our summation of the policy object.
Labor's ideas for any inquiry, we
speculated then, "take the shape of being open to inspiration, centred on hope more than overwhelming knowledge, that well-briefed hounds will corner the banking sector into who knows what."
Only one such hound has been let loose so far, with of the studies soon to be made by Kate Carnell, the Australian Small Business and
Family Enterprise Ombudsman. The government has directed Carnell to revisit arcane niche topics that proved too hard for at least two prior parliamentary inquiries.
More formally put, the Ombudsman will "examine cases of disputed small business lending practices."
Carnell may thus reopen some of the core complaints of the most vocal agitators on alleged misconduct in banking, much of it with a Bankwest flavour. It's a fair bet David Coleman's panel will make time for this as well.
The Turnbull government last month
framed its task for ASBFEO in the context of "the adequacy of the law [and] to address concerns raised by the Parliamentary Joint Committee on Corporations and Financial Services in its May 2016 report,
Impairment of Customer Loans".
This committee report was
released in a hurry, coinciding with the calling of the election and the conclusions were overshadowed by that event.
The parliamentary committee
report provides yet more context for thinking about the efficacy of scrutiny of banks and banking by members of parliament as opposed to more experienced questioners.
Banking Day analysed in May, with scorn, the report of the PJCCFS. See our two articles,
Bankwest irresponsible and CBA unconscionable, Joint Committee finds and
Bankwest and Landmark conspiracies dissolve amid Parliamentary glare.
This travesty informs a views on the pros and cons of the style of committee hearings such as Australian bank CEOs will endure this week.
Rehashing once more:
"One thing can be said for the inquiry into loan impairments; much time has been spent on digressions and diversions by a political class out of its depth.
"Unlike the senators and MPs who ask the questions at a parliamentary committee, the squad of senior counsels assisting a Royal Commission would most likely have read and understood the whole of the briefing material before them."